Aetna CEO: Expecting Merger with Humana By Year’s End



Health care costs in the United States are plaguing both consumers and providers alike with the latest illustration of the trend coming from Aetna on Tuesday. In its second-quarter earnings filing, the insurance provider said it will pull out of planned 2017 expansion into Affordable Care Act exchanges.

The move came after announcements earlier this year from UnitedHealth (UNH) and Humana (HUM), which also announced plans to cut back on ACA exchange participation next year.

“While we are pleased with our overall results, in light of updated 2016 projections for our individual products and the significant structural challenges facing the public exchanges, we intend to withdraw all of our 2017 public exchange expansion plans, and are undertaking a complete evaluation of future participation in our current 15-state footprint,” Mark Bertolini, Aetna’s chairman and CEO, said in a statement.

Aetna, the nation’s third-largest health insurer behind UnitedHealth and Anthem (ANTM), sells Obamacare plans in 15 states. Bertolini said the company has been hurt by the high cost of medications and procedures for customers in the exchanges.

“These people need these procedures and they need these drugs and they need to be covered,” he said. “But when you couple that with a risk-adjustment mechanism for high-risk people, that really is limited by virtue of the legislation, it causes everyone in the system to lose money.”




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